Massive Electrical Outages Due to State Bribery?

Investigation recordings expose state-run IEC officials took $20 million bribe to push faulty system that crashed project to stop outages.

Ari Yashar,

IEC Hadera station control room
IEC Hadera station control room
Yaakov Naumi/Flash 90

As in the snowstorm of 2013 which caused major damage, Israel's current snowstorm has been accompanied by power outages for thousands of Israelis - according to a new report, those outages may have been avoidable and are the direct result of bribery.

Many Israelis were left without power on Friday, after 4,500 homes suffered from power outages on Thursday. Over 17,000 households were powerless throughout the day Wednesday, with that number dropping down to 10,000 in the evening.

Officials in the state owned Israel Electric Corporation (IEC) are suspected of having accepted $20 million in bribes to select a faulty system that eventually failed in a project to prevent power outages, according to a report in the financial magazine Analyst published by Channel 10 on Thursday night.

IEC decided to acquire an advanced system to quickly detect failures long-distance 20 years ago. However, the project was delayed and began costing a fortune, and when it was finally tested results showed the system actually increased the outage time for residents.

Currently there are suspicions in the Israel Securities Authority that bribery given to members of the IEC's tenders committee caused the company to chose a particular provider over competitors that were better suited for the project.

In recent days Analyst received recorded testimony from the investigation materials, in which a senior engineer and member of the tenders committee revealed how bribery apparently led Siemens to be selected in the DMS (Distribution Management System) project - despite the fact that the company fared poorly throughout the competition to receive the project.

"Many proposals were offered," the engineer said. "And suddenly an unexplained turn around happened. A corrupt director who wanted to push Siemens came into the story. He influenced everyone so that Siemens would get it."

That director, former judge Dan Cohen, has avoided facing the music by remaining abroad and not returning to Israel.

"When public employees get bribes for diverting tenders that's a phenomenon of the most serious kind," said Attorney Tzvi Gabai, formerly responsible for enforcement at the Israel Securities Authority. 

Gabai continued "in contrast to what people think, money has a smell and you can track it down. When someone comes who was in the room and decision making process, and says he saw what happened there, that could have a serious weight as evidence."




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